New proposal for Bainbridge water sparks heated words

BAINBRIDGE ISLAND — After 10 months spent inching toward an agreement to outsource management of the city’s water utility, the City Council took an abrupt U-turn Wednesday.

The council jettisoned a draft management agreement with Kitsap Public Utility District after Councilman and Mayor Steve Bonkowski made a surprise proposal to keep management in-house.

Bonkowski, who had been a leading supporter of a management transfer, said he strongly disagreed with the cost analysis provided by City Manager Doug Schulze and said the draft agreement with Kitsap PUD was “not actionable.” He proposed a new plan that he said would keep utility management in-house while cutting rates and redistributing a portion of the utility’s reserve fund to ratepayers.

“I believe that by taking appropriate action by the council, we can retain the water utility here and still provide and incredible level of service,” Bonkowski said.

His unexpected presentation sparked a verbal skirmish among council members, who had come prepared to discuss the Kitsap PUD agreement. But Bonkowski’s proposal also rendered the agreement moot.

Members of the council who previously supported outsourcing management indicated they were interested in Bonkowski’s plan. Opponents of outsourcing were happy enough to scrap the Kitsap PUD agreement and return the discussion to keeping management with the city.

The council decided to review Bonkowski’s proposal at a June 19 study session. Schulze, who was not given an opportunity to defend his work during the discussion, agreed to meet with Bonkowski before the session.

The council’s sudden about-face added another twist to the more than three-year debate over management of the city’s water utility. The discussion resumed in August when Bonkowski made a motion to pursue management proposals from outside agencies. Bonkowski and other supporters of the move said they wanted to investigate the potential for cost savings and improved performance for the city’s water customers.

The city vetted a proposal from Kitsap PUD over the winter, and the Utility Advisory Committee came out in favor of a management transfer. The council instructed Schulze, who joined the city in November, to hammer out the details of an agreement with the district this spring.

Schulze brought back a proposal for a $567,000 per year management contract with Kitsap PUD but strongly recommended against approving it. Schulze warned expenses not covered by the contract would push the city’s cost over $1.1 million, negating any potential savings.

That set the stage for Wednesday’s meeting, where Bonkowski quickly changed the script. In a prepared presentation, Bonkowski said Schulze had failed to bring the council the budget information it needed to act on. He said his own analysis showed Schulze overstated the costs associated with running the utility by more than $200,000, when compared to the city’s actual expenses.

Bonkowski proposed a six-point plan for keeping utility management in-house while also cutting costs. He recommended the council take action to reduce the budget from roughly $1.1 million to $800,000, slash water rates by 35 percent, use general fund money to cover small amounts of staff time otherwise charged to the utility fund, redistribute $3 million from the utility’s reserves to ratepayers, and use the reserves to fund capital projects until further notice. He also asked the council approve a policy to operate the utility to the benefit of customers, as opposed to all city residents.

Schulze was not given an opportunity to rebut Bonkowski’s critique and sat silently as the discussion unfolded. Other council members were quick to his defense.

“If you have a problem with the city manager’s performance then we ask you address the city manager,” Councilwoman Kirsten Hytopoulos said. “We don’t circumvent and hijack the process, that’s not this form of government.”

Councilman Bob Scales said Bonkowski’s presentation was both insulting to staff and outlandish.

“Let’s just slash rates, give everyone refunds, it all sounds great, who cares about how the water utility functions?” Scales said sarcastically. “That’s what this proposal is.”

Bonkowski said he hadn’t intended to suggest malfeasance on the part of staff and was only suggesting a new approach.

“My presentation was to basically say, ‘I want to move forward and provide lower rates to our ratepayers,’” Bonkowski said. “And we’ve spent four long years trying to figure out how to get there.”

The council took comments from the audience, which split roughly along the same lines as council comments. Tensions eased as the council agreed to continue the discussion June 19.